Same-Day Delivery Challenges: The Risks of Using One Provider

on Apr 18, 2023

Same-day delivery is an incredibly effective way to increase conversions, improve customer experience, and meet growing consumer demand.

The same-day delivery market is growing fast as a result. Statista predicts it'll reach $26.4 billion by 2027. 

But same-day delivery can be a tough nut to crack. And it’s even harder if you rely on one company to deliver to your customers.

Below, we outline the risks and challenges of relying on a single same-day delivery partner. You’ll learn how Delivery Solutions can connect your business to multiple carriers and improve your same-day delivery experience.

What's same-day delivery, and why is it important?

Same-day delivery is the fastest delivery method for e-commerce stores. It’s also self-explanatory — customers receive their order the same day they buy it.

Don’t rely on a single provider

While fulfilling online orders within 24 hours was all but impossible a decade or two ago, it is now a growing expectation among consumers — another thing retailers have Amazon to thank for.

Over two-thirds of consumers say fast shipping would make them place an order. More than one-third have ordered same-day delivery within the last six months. 

What does fast mean? For most consumers, it means the very next day or even sooner. Most consumers expect to receive their parcels by the day after they order, and purchase decisions can hinge on shipping times.

Research shows slow delivery times are the third most common cause for abandonments during checkout. Over one-third of customers will abandon a purchase because the estimated shipping time was too long.

Reasons for abondonments during checkout data(Image Source)

Same-day delivery may seem like a simple concept to understand, but it’s a lot harder to make it a reality. The process requires a very high level of integration between a retailer’s online store, a warehouse, and a delivery partner. Every system needs to be connected by an API so information can travel instantly from one destination to the other. When it works well, it looks something like the image below.

How same-day delivery works

The process starts with a customer placing an order on the retailer's platform. Once payment is accepted, an API routes the order information to the storefront or warehouse nearest to the consumer. The closer your storefronts are to consumers, the more feasible same-day delivery becomes — generally, same-day delivery can reach consumers within a 12-mile radius of a store or warehouse.

Delivery partners are notified simultaneously, allowing them to optimize existing delivery schedules or create new ones to deal with an influx of same-day orders. Finally, the courier collects the order from the warehouse and delivers it to the customer.

A good many things need to happen very quickly for customers to get their order on the same day. If a single hiccup occurs — like the order gets routed to the wrong warehouse, or if couriers are too busy to pick up an order — then it’s all too easy for retailers to disappoint their customers.

5 things retailers risk by relying on a single same-day delivery partner

It makes sense for retailers that ‌want to test the same-day delivery waters would do so by partnering with a single provider — after all, no one wants to back out of multiple contracts if the service doesn’t work. But putting all of your eggs in a single delivery partner’s basket presents several risks.

High costs

Same-day delivery is expensive. Carriers charge a premium because of the logistical hurdles that have to be overcome to get products to customers in a matter of hours.

And while almost two-thirds of customers are willing to pay more for faster and more reliable deliveries, high costs still impinge on profitability.

The trouble with relying on a single carrier should be pretty obvious from a cost perspective. A single carrier can charge what they like for same-day deliveries, raising rates during busy periods to maximize profitability.

Retailers are at their mercy regarding pricing. With no opportunity to shop around for the best deal, they're forced to pay whatever it costs so as not to disappoint customers.

Poor warehouse location

Final-mile delivery can be ridiculously inefficient — even more so if you offer a same-day delivery service. That’s because carriers must complete loads of delivery stops while only dropping off a couple of packages at a time.

If your delivery provider’s warehouse location means they have to cover a large area, the inefficiencies worsen. Imagine trying to make same-day deliveries across LA from a single warehouse. Even with dozens of delivery trucks, it’s easy to see how carriers can run out of time.

Retailers risk inefficient deliveries with a single carrier

To make matters worse, fulfillment centers haven’t kept pace with the growth in online orders. Each carrier will only have a handful of warehouse, storefront, or dispatch locations. This can lead to inefficient routing and slow delivery times.

If a storefront is the primary fulfillment center, this can often cause issues with same-day delivery providers, since the provider may not service the area the store is located in. This is another reason multiple providers are a good idea — more reach and availability.

Poor or inefficient tracking

Transparency is key with any same-day delivery service. Customers who choose same-day delivery want their goods fast and want to know their goods are on the way.

You can solve this pain point with a real-time tracking solution or an automated messaging service that sends email updates every time packages reach certain milestones.

By providing customers with a real-time tracking service, you help manage their expectations and prove that you'll deliver on your promise. This reduces the number of order location queries your customer service team has to deal with.

Unfortunately, not every carrier can track same-day deliveries. So if you rely on the same carrier you use for two-day and five-day deliveries to deliver goods the same day, you’re going to disappoint customers.

Inability to scale

Sudden spikes in demand for same-day deliveries should be considered a good thing, especially if those orders include hundreds of new customers. But for retailers that rely on a single same-day delivery partner, unexpected demand can be a disaster.

That’s because it’s hard to scale when you only work with one provider, and that can result in delays.

Take the example of Peloton, whose surging popularity during the pandemic was at risk of being dampened by long delivery times. Even after lockdowns had ended, Peloton was still spending millions trying to fix its supply chain.

This is an extreme scenario, but even a small delay in delivery can cause big problems for your retail brand. That’s because customers don’t easily forgive supply chain issues. Only one in five US consumers will forgive service disruptions.

Poor supply chain integration

To successfully facilitate same-day deliveries, retailers need to work with delivery providers who can integrate seamlessly with their operations. Why? Because orders need to be processed almost immediately, leaving little room for manual processes.

In other words, your delivery partner’s warehouse needs to be hooked up to your checkout so that warehouse operators can start packaging orders as soon as they arrive. 

Carriers also need cutting-edge dispatching software to accurately predict driver availability and optimize routes.

Retailers risk poor supply integration with a single carrier

Not every carrier has this functionality, however. Rely on a single same-day delivery partner that doesn’t and you risk disappointing customers.

Solve those challenges with unified omnichannel platform

Our unified omnichannel platform is a SaaS solution that actively manages the experience of one or more operational processes. In the case of Delivery Solutions, that's e-commerce delivery.

We work with multiple carriers and use custom-built algorithms that gauge availability and scheduling to select the best delivery provider for every order. We give your brand access to all of the data you need, as well as dozens of different same-day delivery partners, to solve the challenges discussed above in the following ways.

Better carrier coverage

To make scalable same-day delivery a realistic proposition, you need to have a warehouse near every neighborhood. That’s virtually impossible when working with a single carrier. Most simply don’t have enough warehouses.

Partner with a vendor that works with multiple delivery companies, however, and suddenly you dramatically increase the number of warehouses your brand can access.

Of course, there's nothing stopping retailers from partnering with multiple carriers on their own accord. The trouble comes in automatically routing orders to the closest warehouse and in managing relationships with each delivery partner.

Often, small regional carriers will be needed to plug geographic blackspots. That can mean managing dozens or even hundreds of carriers at once. It’s a lot for a retailer to take on, but it’s all in a day’s work for an OXM. 

Competitive pricing

When you work with a single same-day delivery partner, retailers only get one price. By working with several carriers, retailers get a couple of pricing options. Work with an OXM platform that connects your store to every carrier in the country, however, and you get the best same-day delivery price every single time.

Get better carrier coverage with an OXM platform

Working with an OXM platform is one of the best ways to make same-day delivery as cost-effective as possible.

A reliable service

The problem with relying on a single carrier is that you have no one else to turn to when things go wrong. If your delivery partner can’t pick up more parcels, your customers won’t get same-day shipping. And that’s after you’ve already promised them it will arrive today at checkout.

That’s not the case when using an OXM platform that connects your brand with multiple carriers. You always have a backup plan in place and a delivery driver to take over if one courier reaches capacity.

Working with an OXM also allows retailers to ensure they get a reliable service themselves. Because everything happens automatically at checkout, there’s no room for human error. Only carriers that can deliver goods get sent orders.

You can’t legislate for traffic accidents and other unforeseen issues that can delay delivery — you can do everything possible to ensure your customers receive a reliable service.

The ability to scale at will

While you can anticipate spikes in demand around public holidays, sudden, random surges in orders can happen at a moment’s notice. A single same-day delivery partner may struggle to handle them, but an OXM platform that works with multiple carriers won’t.

Scale delivery with an OXM platform

By connecting with multiple carriers all at once, a unified platform can help retailers weather even the biggest demand surges. If one carrier can’t handle more orders, another is lined up to take their place.

Better still, retailers are guaranteed to get the best carrier for every single shipment. For instance, Delivery Solution uses built-in algorithms to gauge the eligibility and scheduling of delivery partners, and then selects the best delivery provider every single time.

Ship the same day with Delivery Solutions

Same-day delivery is an opportunity to win new customers and send the loyalty of existing customers soaring. But it’s not almost impossible to achieve these wins when relying on a single same-day delivery partner.

Not only do you hurt your bottom line with high costs, but inefficient tracking, poor warehouse location, and bad supply chain integration threaten the customer relationship. There’s no guarantee you’ll be able to scale to meet demand, either.

You don’t have to manage dozens of different carriers to make same-day delivery work, though. Our Same Day Delivery program allows customers to quickly initiate same-day delivery at pre-negotiated rates without markup. Delivery Solutions will take care of all direct communication with DSPs, helping you reduce the risks of same-day delivery while streamlining your delivery operations.

Schedule a demo to learn how Delivery Solutions can improve your same-day delivery offering.

About the author

Russ Bair

Russ Bair is the Chief Product Officer at Delivery Solutions, the leading provider of last-mile delivery and fulfillment software. He helps ensure retailers achieve their goals and they are able to provide meaningful experiences for their customers.  Prior to his tenure at Delivery Solutions, Russ was President of projekt202—an experience-driven consulting firm founded to apply deep ethnographic research to the development of mobile, web, and workplace software.    He received his Bachelors in Computer Science from Texas A&M and has more than 25 years of extensive experience in the software development and consulting fields. While holding leadership roles within organizations or various sizes, Russ has designed, developed, and led the creation of complex custom software implementations for small, medium, and Fortune 500 companies across the United States.   Russ is fulfilled by helping those around him reach their potential through servant leadership and collaborating to create progress and economic value. He currently lives in the Dallas area with his wife Jana and two children.


Topics from this blog: Delivery Improvement Shipping

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